The US Supreme Court has ruled in Stern v. Marshall (June 23, 2011) that a bankruptcy court lacks jurisdiction to render final judgment on a bankruptcy estate’s compulsory counterclaim against a creditor arising under common law, despite a statutory grant of jurisdiction.

On December 1, 2009, numerous changes to the time periods applicable in bankruptcy cases took effect. These changes, which will impact creditors and debtors alike, are relatively straightforward but must be carefully reviewed and thoroughly understood. Time plays a critical role in the administration of bankruptcy cases, affecting the degree of notice a party is required to give before certain actions can be taken or approved by the bankruptcy court as well as deadlines for filing various documents, asserting various rights and satisfying certain statutory obligations.

As we previewed last week, the U.S. Bankruptcy Court for the Southern District of New York recently handed General Motors (“New GM”) an enormous victory that may end up shielding the company from up to $10 billion in successor liability claims.

In what appears to be a matter of first impression, Bankruptcy Judge Robert D. Drain, United States Bankruptcy Court for the Southern District of New York, has held that a statutory safe harbor against constructive fraudulent conveyance actions under the Bankruptcy Code involving securities transfers does not apply to the private sale of securities, even when there are no allegations of illegal conduct or fraud involved in the underlying transaction.

In a recent order entered in In re SemCrude, L.P., Case No. 08-11525, the Delaware bankruptcy court (1) clarified the application of Bankruptcy Code section 503(b)(9) to creditors’ priority claims arising from the delivery of goods in the 20 days before a bankruptcy filing and (2) amended a previously entered procedures order to allow for the resolution of disputed “Twenty Day Claims” on their merits.

The bankruptcy court yesterday handed General Motors (New GM) an enormous victory that may end up shielding the company from up to $10 billion in potential legal liabilities. In his 138-page ruling, Bankruptcy Judge Robert Gerber held that a 2009 bankruptcy order allowing the sale of the assets of “old” General Motors (Old GM) to New GM shielded New GM from death and injury claims tied to defective ignition switches in older cars.

In September 2010, the District Court for the Eastern District of Virginia denied a reclaiming seller rights despite the claimant’s service of a timely written reclamation demand and compliance with a reclamation procedures order and section 546(c) of the Bankruptcy Code.

Section 546(c) of the Bankruptcy Code provides that:

On September 17, 2009 Judge Peck of the United States Bankruptcy Court for the Southern District of New York issued two orders that may significantly impact parties who held, or still currently hold, derivative contracts with Lehman Brothers Special Financing Inc. (LBSF) or any of the other debtors in the Lehman Brothers bankruptcy cases (the Debtors).

The courts have long struggled with the question of whether particular orders entered by a bankruptcy court are final, and therefore appealable as a matter of right. It is generally recognized that a bankruptcy case is distinctly different from the usual civil case in that it is a framework within which a variety of disputes arise and are resolved. That distinction is recognized in 28 U.S.C. §158(d)(1), which provides that appeals as of right maybe taken not only from final judgments in cases but from “final judgments, orders, and decrees…in cases and proceedings….”

Filing an involuntary bankruptcy petition is an alternative not often considered by creditors. However, faced with the possibility of having to write-off a claim, a creditor may choose to file an involuntary bankruptcy petition in order to put the debtor under the control of the Bankruptcy Code and the bankruptcy court. Such a move comes with risk, and a recent Eleventh Circuit Court of Appeals decision may expand that risk.